Luigi Lonardo, LLM in EU Law, King’s College London
The Court of Justice of the European Union’s (CJEU) first ruling on what is a ‘defective product’[1] will likely not be the last one, since it was highly ambiguous to say the least. The judgement is doomed to have broad repercussions indeed on European product liability litigation and consumer protection law.
The Court found that, with reference to medical devices implantable in the human body, “a product is defective“ within the meaning of Article 6 of Directive 85/374[2] (“the Directive”) “if products belonging to the same group or forming part of the same production series have a potential defect“. In other words, there is no need to prove the defect in each individual case, if other products in the same batch have a potential defect. Moreover, the Court stated, under Article 9 of the same Directive, the producer is liable for the damages caused by a surgical operation necessary to replace a defective product.
Even if limited to implantable medical devices, such a definition may nonetheless surge compensation claims against producers and insurers for two reasons. First it simplifies what the claimant has to prove. Second it resorts to ill-defined concepts that may lead national courts to request further clarifications and plaintiffs to try action by taking advantage of the indiscriminate wording of Boston Scientific.
The facts of the cases and the two questions referred for a preliminary ruling
The cases originate from the requests of insurers to recover the costs of surgical operations to remove pacemakers in one case, and, in the other, a defibrillator. Boston Scientific (BS) is a worldwide producer and seller of medical devices implantable in the human body. After having identified a defect in some pacemakers, which may have exhausted the battery without notice, BS offered all the clients free replacement products. The patients B and W, both covered by insurance, had the pacemakers removed.
The products that B and W had initially used were destroyed after the surgery without being examined. Therefore it is unknown whether they had a defective battery. The insurance company then asked BS to pay the costs of the surgery necessary for the replacement. Moreover, BS identified a similar problem in a defibrillator. Patient F decided to have it substituted even though BS did not make a specific recommendation in this sense and the insurer then acted against BS to recover the cost. The two cases were joined.
The referring judge, the German Bundesgerichthof (Federal Court of Justice), asked the CJEU two questions, with reference to medical devices:
(1) Is a product defective, for the purposes of Article 6 of the Directive, when other products belonging to the same group or production series have a potential defect, even absent proof that the individual product in question has that defect?
(2) Does the cost of a surgical operation to replace that individual product constitute damages for personal injury pursuant to Article 9 of the Directive?
The Judgment
To motivate the extensive notion of “defective product”, the Court basically followed the opinion of the Advocate General Bot. He derived the solution from an “objective” reading of the directive, that is, regard must be had to abstract standards of safety, and not to the individual product in question.[3] Moreover, he developed a teleological argument on the protection of health.
The Court held that a product is defective when, according to Article 6(1) of the Directive, “it does not provide the safety which a person is entitled to expect”. In particular, in respect of medical products, the Court specified that it has to take into account their function and the particularly vulnerable situation of patients recurring to those devices. Hence, patients are entitled to expect particularly high safety requirements for those devices.[4]
It also noted that in the circumstances, the lack of safety in such a product derives from the “abnormal potential for damage”.[5] What “abnormal” means, however, is not further specified. Hence, the Court concluded, where it is found that products belonging to the same group or forming part of the same production series, such as pacemakers and implantable cardiovascular defibrillators, have a potential defect, it is possible to classify as defective all the products in that group or series, without there being any need to show that the product in question is defective.
In respect of whether the costs of surgery to replace the product constitute recoverable damage, the Court held that from Articles 1 and 9 of the Directive it follows that it does, when the operation is necessary to “overcome” the defect in the product, that is, to eliminate harmful consequences.[6] For the pacemakers, the Court found that since BS itself recommended their replacement, it should also bear the relative costs. However, the situation of the defibrillator was a bit different in so far as it could simply be deactivated and it was not clear whether the surgical removal was necessary. Since this assessment requires a factual analysis, it is for the national Court to determine. As far the costs for the removal of the defibrillator were concerned, therefore, the CJEU left the decision to the Budesgerichthof.
Comments: the consequences of the judgment
Such a broad definition of “defective product” virtually means the presumption of the defect: but this simplifies the burden of proof for the consumer. A plaintiff, therefore, will only have to allege the “potential defect” in products of the same series and not the defect in the individual product. However, this presumption is at stake with the wordings and the general scheme of the Directive. Pursuant to its Article 4, the consumer has to prove the defect. This article was introduced because, in order to attain the “fair apportionment of the risk” between the consumer and the producer (2nd recital), the Directive imposes a strict liability to the producer, allotting on the other hand the burden of proof on the consumer.
The extensive notion of “defect” is therefore at issue with the ideal of “fair apportionment of the risk”, which imposed a precise burden of proof on the consumer. As a matter of fact, the consumers’ action is simplified by the CJEU ruling, whereas the liability for the producers is left intact. Hence, the Opinion of the AG Bot is criticised as well. To begin with, its interpretation of the Directive results in facilitating the consumers to bring claims. Moreover, the precedents he quoted to support the objective reading of the Directive do not fit. The AG Bot quotes Aventis Pasteur[7] and the case law there cited (O’Byrne[8] and Commission v Cantina Sociale Dolianova[9]): these three cases did not take any stance neither on the definition of defect, nor on any “objectivity” of the Directive, since they only affirmed the objective nature of the provisions concerning time limitations. Indeed it seems, from the 2nd recital of the Directive, that the European legislator created a system of apportionment of the risk that cannot be tilted in favour of the producer or, as it is done here, of the consumer. The result would necessarily be an alteration of the “fair” apportionment foreseen by EU law.
The Court, furthermore, left too many concepts unexplained. The vague language used may give rise to future references of national courts requesting clarifications from the CJEU under the preliminary ruling procedure. For example, one may plausibly ask how many products in the same batch need to have a potential defect: from the judgment, it seems that the defect of one single product affects all the thousands of other in the same series of production Another undetermined issue is what threshold, if any, does a defect need to meet to be considered “potential”, and thus affect all the other products in the same production series: maybe a defect is “potential” if experts acknowledge that it is reasonable that it occurs (as for the defibrillator in Boston Scientific)- but this threshold is not only very low, but also very subjective, and it lacks legal certainty. Furthermore, the Court did not specify what is the test to apply to assess the “abnormal potential for damage” (does the damage need to have abnormal consequences? Or does it mean it is abnormally likely to happen?).
Is the scope of the decision limited to medical devices implanted in the human body or is the principle valid for any defective product?[10] Despite giving an extensive interpretation of “defect”, the Court seems cautious: it wants to narrow the scope of the decision[11] to devices “such as pacemakers and implantable cardioverter defibrillators”. That the principle should be applied only to medical devices is consistent with the reasoning adopted by the AG Bot[12] and by the Court[13], which arguably based it ratio decidendi precisely on the nature of these products. Nonetheless, for lawyers wanting to box clever and use Boston Scientific as a precedent to support claims for any kind of defective products (eg, a washing machine), what the specific ration of the Court was in this case may be just water off a duck’s back. It is thus desirable that, in future cases, the Court states even more clearly that the “batch liability” only applies for medical devices implantable in the human body. The CJEU has already done something akin in Trojani[14], where it held that Bettray[15] could not constitute a precedent because its motivation “can be explained only by the particular characteristics of the case in question”. .
The first ruling of the CJEU on the concept of “defect” is likely to result in a growth in compensation claims against producers of medical devices, given that the ruling considerably simplifies the burden of proof for claimants and defines ambiguously some concepts that instead deserve to be clarified with.[16]
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[1] Joined Cases C‑503/13 and C‑504/13 Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt — Die Gesundheitskasse and Betriebskrankenkasse RWE, judgement delivered by the Fourth Chamber on the 5th of March 2015.
[2] Directive on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (OJ 1985 L 210/29).
[3] Joined Cases C‑503/13 and C‑504/13 Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt — Die Gesundheitskasse and Betriebskrankenkasse RWE, Opinion of AG Bot, par 29.
[4] Boston Scientific (n 1) par 39.
[5] Ibid, par 40.
[6] Ibid par 55.
[7] Case C-358/08 Aventis Pasteur SA v OB [2009] ECR I-11305, par 48.
[8] Case C-127/04 O’Byrne (Declan) v Sanofi Pasteur MSD Ltd, formerly Aventis Pasteur MSD Ltd [2006] ECR I-1313 par 26.
[9] Case C-51/05 Commission v Cantina Sociale di Dolianova and Others, [2008] ECR I-5341 par 29.
[10] M. Manni, “Responsibility for damages caused by a medical defective device: a recent CJEU ruling “, Il Sole 24 Ore (1st April 2015) availabke ar <http://www.diritto24.ilsole24ore.com/art/avvocatoAffari/mercatiImpresa/2015-04-01/responsabilita-danni-dispositivo-medico-difettoso-recente-sentenza-cgue–121822.php>.
[11] J.A. Luzak, “Strict product liability for recall of medicinal devices – CJEU in Boston Scientific Medizintechnik GmbH (C-503/13 and C-504/13)” on Recent Developments in European Consumer Law available at <http://recent-ecl.blogspot.co.uk/2015/03/strict-product-liability-for-recall-of.html>.
[12] Boston Scientific (n1), par 43.
[13] Boston Scientific, Opinion of AG Bot (n 3) par 39.
[14] Case C-456/02 Trojani [2004] ECR I-7573 par 19.
[15] Case 344/87 Bettray [1989] ECR 1621.
[16] A.S. Graells ” Don’t skip a beat: CJEU intends to strengthen consumer protection of medical devices, but does it? (C-503/13) on How to Crack a Nut, available at <http://howtocrackanut.blogspot.co.uk/2015/03/dont-skip-beat-cjeu-intends-to.html>.